TeleCLAIM Version II Executive Summary

The Universal Internet PBM system announced 1/14/2000

• Maximizes the administrative capabilities of a PBM (Pharmacy Benefit Management organization),

• Maximizes the benefits provided by Internet communications of cyberspace,

• Maximum flexibility for utilization of proven Managed Care techniques enabling improved PMPM costs and improved therapeutic outcomes,

• Maximizes the integration of Physicians and Pharmacies into the most effective therapeutic management team.

     The PBM takes full responsibility for the prescription fulfillment system thereby relieving the benefit sponsor from day-to-day involvement and management of the program. The PBM, in modern parlance, is the ultimate outsource service.

     The PBM is an important part of the entire medical system solution for a government, an insurance company, or any HMO and PPO. The better the job performed by the PBM (effective outcomes), the lower the burden on the Hospital and Physician resources of the medical benefit program. Pharmaceutical costs ordinarily occupy about 12% of the entire medical budget and expenditures while Hospitalization and physician costs make up the remainder. Considering an additional cost of $200 in pharmaceuticals for one patient, who otherwise would have avoided drug therapy, preventing a hospital admission of that patient creates a leveraged cost advantage of possibly 10:1. The cost of the hospitalization, even for just three days, may be eliminated and save as much as $2,000. The physician cost being comparable in either scenario results in the substantial reduction in aggregate costs. If only 10% of admissions could be avoided, we may achieve a net savings of 5% or greater of total benefit program costs.

     The TeleCLAIM II system is designed for the PBM with multiple clientele. The system allows completely different benefit sponsor entities to be served by the system without compromising security or independence for each benefit sponsor.

     Thousands of Benefit Plans are possible for each client. TeleCLAIM’s PlanBuilder module enables the easy creation and maintenance of complex benefit plans for each of these benefit sponsor clients. Each client has the ability to inquire and maintain oversight by unfettered access to the databases without concern of conflict with other systems clients. All clients are transparent to one another.

     The new TeleCLAIM II system enables digital data communication methodologies operating under TCP/IP. This is the cyberspace protocol that enables the adaptation to Internet technology. All existing, old and new, data communications can be simultaneously operated in the TeleCLAIM system. Wireless and traditional wire carrier systems, digital and analogue, can be handled by the TeleCLAIM II system.

     The new TeleCLAIM II system has been upgraded to simultaneously manage multiple languages and financial currencies. Any Point of Sale (POS) terminal may be toggled between Spanish, Portuguese and English terminal Internet HTML display screens and selection of the corresponding national currency of pesos, reals and dollars appropriate to the local country as is required in South America (corresponding to the database of the host POS).

     The new TeleCLAIM II also accommodates and facilitates Internet communications for Physicians, Benefit Sponsor administrators, or any professionals authorized for accessibility by the system administrator.

     This means that authorized physicians can inquire, for the first time, from their own offices to patient records and prescribe a sponsor compliant drug for their patient. The physician looks into all patient prescriptions prescribed by multiple physicians and is counseled through available formulary drugs to influence more desirable and preferred pharmaceuticals designated by the PBM’s own therapeutic formulations.

     The TeleCLAIM II system has a very discriminating security methodology that enables inquiry and maintenance for PBM authorized personnel to access various designated security levels of database files. Now: physicians, administrators, clinical pharmacists, and management all have access to vital patient data. This common information data accessibility enhances the opportunity to improve treatment of patients as a team effort linking the various medical professionals involved. They can all have simultaneous access to the same data files.

     The ultimate measurement of any drug program for any benefit sponsor is the PMPM cost computations. This is the drug cost per member per month. This cost amount is highly influenced or controlled by several factors: formulary management and compliance, generic use maximization, refill-too-soon enforcement, and duplicate therapy interception. However, the escalating utilization rate experienced each year may overwhelm all savings developed and obscure the impact of these savings.

     There are other factors but these represent the most significant and effective ones. TeleCLAIM provides great flexibility in the management control of these factors.

     A Formulary is list of drugs selected as a mandatory or a preferred group of drugs over unselected ones that may be less therapeutically effective and /or more expensive. Formularies may be individualized for each plan under TeleCLAIM and they may be attached to any member, group or higher level entity. The formulary can be closed and inflexible or open and very easily bypassed. The formulary can be designated on a global basis or can be specific by drug number or class specification.

     Included in a formulary may be a large number of generic drugs for their therapeutic effectiveness and always their lower cost. Generics may also be encouraged for their substitution of an expensive brand drug by the patient by providing enticing substantial lower co-payments or "co-pays". The co-pay may be designated as a flat rate, a percentage of ingredient cost or several other strategies that influence selection of the generic.

     Another highly effective method of improving patient compliance with the prescribed therapy is the prevention of premature delivery of refill dispensing. The programmed control of drug dispensing is called the "Refill-too-soon" protocol provided by TeleCLAIM. This control logic curtails allowing refills before the designated prescribed expiration. It ultimately improves outcomes and lowers overall cost of drug utilization. Without this control, it is possible that utilization improperly escalated can increase costs by 10% to 30% as a number of benefit managers have reported.

     The major contributor to controlling all aspects of prescribing and dispensing is a program module called "PlanBuilder". This program is the most significant TeleCLAIM advantage to the user as it allows the easy implementation of the controlling parameters discussed above.

     PlanBuilder provides a simple-to-use "programming" tool for the benefit administrator. It orchestrates the proper use of an enormous number of options and parameters. It enables very close and strategic management of the drug benefit program. It does this by creating a comprehensive definition of a "plan". A plan is the construction of a series of formulae, using options and parameters, that when executed achieve the limited variations provided a custom program for the member of the plan. That specific plan can then be attached to a member, a group, a division or an entire company and faithfully follow the rules set into the plan.

     The plan determines or influences the drug selected; compliance with a formulary or designated rules; it determines the price charged and the co-pay paid by the patient; it ensures that the patient pays a deductible, if applicable, or pay the full amount when a maximum for a year or lifetime is exceeded; it denies a drug when the prescription is written by an unauthorized physician; and many other like-restrictions can be employed.

     The plan construction tool, PlanBuilder, is a program that presents a series of 12 topical screens that provide data entries of Xs, prices and cost amounts, percentages, restriction notes, and a number of other parameters.

     The 12 plan defining pages are accompanied by 15 other page-attachable "appendices". These appendices are a variety of created data lists that can be used for defining additions or deletions to a generalized definition of one of the initial 12 pages. (i.e. – a list of physician practice-specialties that can prescribe only a certain drug or class of drugs.)

     PlanBuilder’s vast capabilities are too great to be adequately described here. They are described in greater detail in the DP/Rx booklet entitled "Overview of PlanBuilder".

     An important aspect of today’s medical treatment regimens is the emergence of a program called Disease State Management. This codified program has now addressed the strict adherence of the patient to the prescribed therapy. Many studies have found that better compliance to prescribed therapies can substantially increase the success rate of patient disease and illness improvement. Unsuccessful patient therapy compliance results in increased hospitalizations and, therefore, higher medical costs and increased patient complications and, in some cases, premature mortality.

     The full TeleCLAIM system includes a number of system display and printed reports that track patient compliance.These reports are distributed to the corresponding Physicians and other providers to ensure better compliance of the patient. New Internet access to these reports is possible where action programs are instituted by PBM management.

     Recent TeleCLAIM product announcements have added automated personal voice contact actions taken by the computer. A computer system is dedicated to this process. It contains specialized software that initiates scripted message translation to voice messaging. The message is communicated to the patient by automatic dialing programs much like automated marketing programs.

     When a patient is found to be at the end of the dispensed quantity of a prescription, the computer automatically calls the patient with a voice message that indicates it is time for a refill. The patient may respond by pressing phone keys to indicate compliance or other indications of therapy status.

     Other similar auto-voice products are implemented for the pharmacist. The basic module for the pharmacist allows phone keying inquiries for patient eligibility. Other features include voice response of deductible and maximum amount status. Each is handled automatically without contact to a manned help desk. Calls of eligibility inquiry can be made at any time 7X24.

     Note that the Server contains the primary storage of all databases. The claims history database is of-loaded routinely for archiving and checkpoints for recovery restore functions. Additional security is provided with storage of recent claims in the Adjudicator and the Front End processor.